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Big Home Builders Push Energy Efficiency
Appear in: The Wall Street Journal, August 8, 2001
Homebuilders are finally making a power play.
Prodded by a host of factors-including government incentives, more affordable solar and other equipment and the potential for fewer battles with nearby residences and environmental groups-developers are moving into an arena that had largely been the domain of custom-homebuilders or homes in remote areas: They are building homes that are promising energy savings and a secure supply of energy.
Take the single-family home development that recently broke ground in San Diego, Calif. The developer, Pardee Construction Co., plans to outfit each of the 97 homes at its newest development with solar-power panels and battery backup systems that will supply electricity even during blackouts. Moreover, each house will exceed federal standards for energy efficiency.
Though these features will add about $18,000 to the cost of constructing each home, Pardee thinks it’s well worth it: They will make the Los Angeles-based home builder eligible for a host of benefits, including rebates, advertising, and marketing from the local utility, and a quicker building-permit approval from the city. What’s more, the extras helped the development win an endorsement from the local Sierra Club chapter.
“The energy crisis has created marketing opportunities that more and more builders are taking advantage of by building beyond code or adding solar,” says Michael Hodgson, president of ConSol Inc., and energy-efficiency consulting firm in Stockton, Calif.
Reaching for the Stars
The number of home builders participating in the EPA’s five-year old Energy Star-labeled homes program more than doubled in the past year alone to 765, and as of the end of June, there were about 38,400 Energy Star labeled homes in the US.
Another Energy Star incentive: Nearly 40 jurisdictions, most of them in California, offer quicker permit approval or reduced fees to developers that build Energy Star homes, according to Colorado Energy Group Inc., a Boulder, Colo., consulting firm.
Golden Rays
Mass-production home developers also are starting to take advantage of state rebates for solar projects. The Florida Energy Office offers a $2 rebate to homeowners and builders for every watt of solar power- or photovoltaic-system can generate. The California Energy Commission offers a similar rebate to those who install solar or other “green energy” generation systems in homes. The program refunds half of the cost of the system or $4.50 for every watt the system can generate, whichever is less. Although the program is three years old, most of the applications have been “for a home here and a home there rather than for a whole new development,” says Marwan Masri, who manages the California program. “Interest from the building industry is really new.”
Indeed, the first large-scale residential development in the nation to offer solar power as a feature debuted in San Diego just a few months ago. Only about 48 of the 300 homes in the subdivision being built by Shea Homes construction, a unit of Walnut, Calif., concern J.F. Shea Co., have been completed, but only a few remain unsold. The solar systems, which will be offered on all but about 80 homes (which weren’t suitable for solar panels given their orientation to the sun), cost the developer about $6,000 a home. The homes, which range in size from 2,200 to nearly 4,000 square feet, are selling for $400,000 to nearly $700,000.
“Our sales have outpaced the competition,” in the area, says Teri Shusterman, Shea’s San Diego marketing director. “I can’t help but believe it’s the energy efficiencies and solar aspects that we’re offering,” that spurred the swift sales pace, she says. Another benefit for Shea: The solar systems allowed in to shave off about a week from the building-approval process and make the company eligible for rebates from the state and the local utility.
Rolling the Dice
Similarly, Pardee Construction began buildings homes in Las Vegas a few years ago that are 30% more efficient than the building code requires.
“Las Vegas is a very competitive market,” says Joyce Mason, Pardee’s vice president of marketing. “It appears to us that when buyers have a choice, even if they have to pay a little more, they go for the energy-saving home.” Pardee is looking into installing solar-energy systems in its homes, Ms. Mason adds.
Last year, Centex Corp. began building “above code” to take the advantage of the rebates being offered by the utility companies, says Eric Eilar, the estimating manager for the Los Angeles division of the Dallas-based builder. Two developments in Southern California, totaling nearly 150 units, are “selling well” because of the features, he says. “The rebates and the marketing advantage we gain go a long way.
Sheila Muto
Staff Reporter of The Wall Street Journal
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